Amazon and Lightning Source: The End of an Era?

by | Sep 9, 2011

Table of Contents

For some years now many small publishers and self-publishers have been using a very effective strategy for distributing their books. This strategy has been widely written about and imitated. It was pioneered, as far as I know, by Aaron Shepard and Morris Rosenthal, both early proponents of print on demand distribution.

Here’s how the strategy works:

  1. Set up as a publisher with Lightning Source
  2. Set your discount to the shortest discount possible, 20%
  3. Have your book supplied to Amazon, where the vast majority of your sales will occur, at a discount that saves at least 20% off what you would have to pay Amazon otherwise.

On my standard book for pricing, here’s how this strategy plays out:
(A 200 page 6 x 9 paperback with no graphics or illustrations and simple formatting.)

Retail $15.00
Wholesale $12.00 ($15.00 less 20%, or $3.00 = $12.00)
Print cost $3.50
Net profit per copy sold $8.50 ($12.00 less $3.50)

This puts tremendous economic leverage in the hands of a self-publisher.

The Party’s Over

Now Amazon has changed the way they deal with books from Lightning Source and other print on demand suppliers—all except their own supplier, CreateSpace.

Perhaps in an effort to trim costs, they have changed the way they drop ship books using the third party vendors, and instead using their own warehousing and fulfillment. Whatever the reason, many books from these vendors are now showing up with an availability of “Ships in 2 to 3 weeks.”

A Self-Publisher's Companion

This is a real sales killer. When I heard about this move earlier this summer, I decided to leave A Self-Publisher’s Companion alone and see what happened.

And what happened was pretty bad. The book went to the dreaded “Ships in 2 to 3 weeks” and its sales rank took a nosedive as sales dried up.

A few weeks later, with the inventory apparently replenished, the book returned to a normal “In Stock. Ships from and sold by Amazon.” But it only lasted a few days until the listing started showing “Only 3 copies left” and eventually went back to “Ships in 2 to 3 weeks.”

Solutions

As the most vocal proponent of the short discount strategy, Aaron Shepard admitted the world had changed, and came up with a “Plan B” to help other publishers facing this challenge.

For about the past decade, the most profitable approach to selling books on Amazon has been to distribute through Lightning Source at a short discount—a strategy I helped introduce in my book Aiming at Amazon and elaborated on in its companion volume, POD for Profit. But now it looks like the days of that strategy may have come to an end. For those of us currently working with Lightning, the question is, what will replace that approach? In other words, what is Plan B?—Aaron Shepard’s Publishing Blog

You can read the whole of Plan B by following the link, but part of the strategy is to make your book available at both CreateSpace and Lightning Source—with the same ISBN—to take advantage of both companies’ strengths.

This is what I’m now recommending to my clients who are at Lightning Source. Others I’m sending directly to CreateSpace.

What’s the impact of this difference? At CreateSpace the “shortest” discount you can set is 40%. Here’s how it works out:

Retail $15.00
Wholesale $9.00 ($15.00 less 40%, or $6.00 = $9.00)
Print cost $3.50
Net profit per copy sold $5.50 ($9.00 less $3.50)

In other words, for every copy you sell at 40% discount instead of 20% discount, you will make $3.00 less. If you sell 100 books, you’ve just lost $300.

Now, it never feels good to lose control of a process that’s at the heart of your business model. But remember that publishing is a lot more than a specific margin per book.

In fact this is a great reminder for all of us that the form we use to send our work, our ideas, our stories and our passions into the world is not the crucial part of our business. What’s crucial—and what people pay for—is the value we create for our readers.

It’s interesting to me that Shepard, in the same article, now recommends new self-publishers skip print books entirely until they’ve tested their works in e-book form.

Let’s be nimble. As the world of books continues to twist and turn into new and startling shapes, let’s keep adapting, coming up with whatever Plan Bs, Plan Cs, Plan Ds we need to in order to continue what we started when we first decided to publish our work.

tbd advanced publishing starter kit

278 Comments

  1. Janet Fix

    As a publisher with Lightning Source/Ingram for over 50 books, I cannot express my frustration with Amazon’s approach on availability of POD books that are not Createspace created. I’ve recently written a brief blog about this after working with both Amazon (uh, no real answers) and with Ingram (some interesting answers). Here it is: https://thewordverve.com/whats-bigger-amazon/ WHAT’S BIGGER THAN (AN) AMAZON?

    I smell stink.

    Reply
  2. Diane

    Thanks, Joel. I followed the advice to upload my title to CS since the difficulties with the IS book persisted, ie., a 1-2 month delivery time. Although I wish the Amazon gave better service to IS books, I decided I just couldn’t lose all those sales. On this past Sunday I uploaded both the interior file and the cover file–exact same ones I had used at IS. According to the CS instructions, they now will adjust the spine width. The proof copy came today. It looks great, and the spine is just right. So I didn’t even have to redo the spine. Once I hit approve the proof, the book went to In Stock within 5 minutes. So I’m back in business. I’ll most likely do this with additional titles.

    Reply
    • Joel Friedlander

      Diane, I think you’ve done exactly the right thing to maximize your sales. Although it’s a bit of a pain, until something better comes along, using both CS and IS is a good solution that will get your book the widest exposure and yield you the highest profit.

      Reply
  3. diane

    Amazon now appears to be making things even worse for publishers who use Ingram Spark. The books from my press were listed as May Need an Extra 1-2 days to ship. That was not a problem. But suddenly all of my press’s books were listed as “available only from third party dealers.” Total sales killer. After calling Ingram Spark, they rebroadcast the metadata and the listings went back to the 1-2 days one. Two days later, two of the books again became available only from third party dealers. As a small press poetry dealer, I don’t want to have to also list with Create Space. For one things, I resent what feels like being bullied to use Amazon’s own printing service. For another, our books are all poetry and there will be a problem getting them to do spines as the total page length of each book is less than what they require. A book without a printed spine looks unprofessional to me.

    Reply
    • ChopChopGirl

      Same thing happened to me at right about the same time….Ingram has resubmitted the feed twice, and while no longer only third party dealers, now the best I can see is “ships within one to two months”…. A small publisher who has been at this for 10 years and has published about 4,000 books says this happens every 12-18 months and then settles out. Could be some negotiations between Ingram and Amazon. Maybe something else….. His opinion is Amazon can never overtake Ingram/Lightning Source, but maybe every once in awhile can ding them a bit. I’m not so sure about this opinion after reading so much on this topic. He is very knowledgeable so I hope his theory plays out and all goes back to normal soon. Good luck

      Reply
  4. Mark

    Thanks for the article. If a self-published POD book is listed via Lightning Source (only) and thus with Ingram, but not directly uploaded to CreateSpace, will Amazon list it? For simplicity I am thinking of just going with Lightning Source, but would like it to be on Amazon. I understand royalties may be lower this way for sales via Amazon, but my priority is that, to boost my credibility, potential clients see a physical book, see there is an ISBN, can get order it via a bookstore if they want, and can see it on Amazon.

    Or is CreateSpace the only way to get a book on Amazon unless you are already a famous actor, politician or celebrity with a traditional publishing house?

    Reply
  5. Publisher

    As an established LSI publisher who is now also using CreateSpace, what discount do you recommend with LSI for the same work published via CS?

    Reply
    • Joel Friedlander

      Publisher, at CS you need to give 40% and there’s no reason to go over that since in the scenario you describe you’ll only be using CS to fulfill Amazon orders. At LSI, it depends on what type of book and promotion you’re planning. If you believe your book has national appeal, will be of interest to retail booksellers, and you have real plans to promote it for that type of distribution, you’ll want to go to 55% discount. If not, I would go with the minimum discount they will allow, it might still be 20%. Hope that helps.

      Reply
      • Patrick

        Intrigued by this response. My wife and I are working on a book that we think has national appeal, but more so to public libraries than the general public. To put it another way, we are more concerned with easy ordering by schools and libraries than we are about being in brick and mortar stores. We would like to optimize revenue with this in mind. How would you discount a book at Lightning Source in 2017 given this situation if we also did the 40% CS for Amazon orders? Thanks for any insights you may have! Your blog has been tremendously helpful this evening.

        Reply
        • Sharon Goldinger

          Patrick, glad the blog posts have been hekpful. Regarding your question, the 40% discount for LSI/IngramSpark should work fine for libraries.

          Reply
  6. alan

    Any update on this Joel? I just published a book through LSI and amazon.com it says “In stock but usually requires an extra 1-2 days to process” but on Amazon.co.uk it says “Usually Despatched Within 2-3 weeks” which is a real sales killer

    Reply
    • Joel Friedlander

      Alan, you might consider also publishing the book through CreateSpace, which will fulfill Amazon orders without delay.

      Reply
      • Jen

        Hi there. I’m wondering what to do as my book hit the market this past Sunday Feb 14th, I purchased a publishing package with Lulu. So global distribution included my book launching ebook to: iBook, kobo, Barnes and noble and of course Amazon. I was very excited about Amazon. In two days they have: put the book on sight as 1-2 day processing to: 2-4 weeks delivery. To: removing a couple of great reviews people wrote. My question: what does it cost/ how do I go about getting it listed with CS? Is that what you’d recommend? I’ve got the isbn numbers for both forms. Paperback. Etc. But I already know my sales will tank with this shipping delay! So disappointed. My first book. I’ve spent thousands.
        Thanks! Any advise is extremely appreciated!

        Reply
        • Joel Friedlander

          Hi Jen,

          Congratulations on getting your book done, and don’t worry, on first books these things happen pretty regularly. You can open an account with CreateSpace and use the same interior file you used with Lulu, although the spine on your cover will need a small adjustment due to paper thickness differences. Once it’s available on CreateSpace, the “2-4 weeks” will disappear. Also, you may be surprised at the cost difference between CS and Lulu. Best of luck.

          Reply
          • jen

            Thanks! Does it have to be re published with CS? I’m new to all of it. Not sure if this is a one two three it’s done kind of thing with CS. I’ve spent 2k with Lulu getting it up and going. Do you recommend this now or wait a bit?
            Thanks again!

          • Diane

            Joel–What is the exact paper thickness for CS and for IS? I now have IS but am interested in also uploading to CS to avoid the Amazon issues with availability.

          • Joel Friedlander

            Diane, CreateSpace lists the paper thickness (multiply by number of pages) as:

            White 0.002252 in
            Cream 0.0025 in

            Ingram doesn’t list the thickness of their various paper stocks, but you can infer the difference by using their Cover Template Generator which will produce a spine width calculated to 4 digits. Hope that helps.

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